Logistics sector expresses concerns over development of new UK Customs system

The British International Freight Association (BIFA) has expressed numerous concerns over the progress of the development of a new computer system that will replace an existing system used for processing Customs declarations.

BIFA Director General, Robert Keen says that with the freight and logistics sector facing numerous challenges including the increasing likelihood of a no-deal Brexit, and the demands that it will put on the companies that are responsible for moving the UK’s visible trade, BIFA is concerned that progress with the development of the new system has been inconsistent, with periods of activity and progress, and then little concrete news.

Keen states: “Our single greatest concern is that currently the development process does not involve representatives of the end-user. This is a dangerous oversight because it is the end-user who will determine what will actually work in practice, particularly as IT developers have been flagging up a lack of clarity regarding data elements.

“To give a simple example, LIC 99, which indicates a licence waiver for all types of goods, is to be replaced. The new requirement will be for a licence waiver for individual types of licences, which potentially adds complexity and makes entry completion more difficult in practice.

“Furthermore, despite initial assurances from HMRC to the contrary, it is clear that the new system will require more significant changes to commercial software systems than previously envisaged. To give a simple example, a declaration on the current system – Customs Handling of Import and Export Freight (CHIEF) – requires the completion of 59 data fields, whilst a declaration on the replacement system – Customs Declaration System (CDS) – will consist of 78 data fields for import and 65 for export declarations.”

The development of the new system includes many stakeholders – HMRC, IBM, community systems providers (CSPs), numerous software providers and representatives.

Keen notes that some of the CSPs and software providers have already highlighted the difficulties faced in developing the new system, the distinct lack of clarity regarding some of the data elements and the incomplete nature of some of the development work. For BIFA, there is a clear indication that the IT sector has concerns regarding the programme and the suggested timeframes.

He says: “HMRC has recently announced its proposed plan for completing delivery of the new Customs Declaration System and migrating traders to the new platform, which requires all traders to migrate from CHIEF to CDS by September 2020 in order for HMRC to meet its requirement to turn off CHIEF in March 2021 when the current contract ends.

“We have heard from CSPs and other software developers, and HMRC itself, that this timeline is challenging and understand that HMRC has requested software developers and CSPs to expedite their plans to deliver and assure the necessary changes to IT systems and business processes without compromising the integrity of the border, or the flow of international trade.”

Based on currently available information, BIFA is challenging HMRC, in conjunction with the IT sector, to identify all the problem areas and formulate a plan to resolve them, whilst agreeing a realistic timeframe to deliver the new system, fully developed, stable and tested. It also wants urgent consideration to be given to involve end-users to ensure that the outcomes actually work in practice.

Keen adds: “Everyone concerned needs to remember that developing the new core system is only one part of a much bigger jigsaw. Customs agents will have to collect significantly greater amounts of data from their customers. Also, within individual data fields we see an increase in options. For instance, as previously indicated, LIC99 is a single licence waiver covering all goods. It is thought that this code will be replaced by multiple options dependent on the type of licence waiver being claimed.

“We are encouraging our members to consider how they will collect and store this additional information from clients, who often are not fully aware of the new requirements.

“On top of all these issues, we have to factor in the increasing likelihood of a no-deal Brexit, and the demands that it will put on our sector.

“In this scenario it has to be accepted by all that the implementation of CDS will have to be delayed, whilst we are using existing systems to facilitate cargo movements and communicating with the various government agencies to allow them to perform their role to collect revenues without compromising the integrity of the border, the flow of international trade, or frontier security.”